B.C. lumber production rose in November following two months of declines, but remained within the narrow range observed through most of 2012.

Local mills produced a seasonally adjusted 2.46 million dry cubic metres during the month, marking a 3.6-per-cent increase from October, and pushing year-to-date gains to about 2.6 per cent.

Despite level production trends in recent quarters, annual output likely reached a five-year high in 2012 as export demand gradually ratcheted higher on increased residential construction activity in the U.S. and elevated activity in Canada.

Through November, shipments of B.C. softwood lumber to international markets reached 22.3 million dry cubic metres, up seven per cent from the same period in 2011. A 14.7-per-cent surge in exports to the U.S. was dulled by a more modest gain of 1.1 per cent to China. Export growth to China slowed, following a 62-per-cent increase in 2011.

A recovery in lumber production is forecast to persist this year. While B.C.'s forestry industry is less reliant on the U.S. than it was in the past due to the rise of China, our southern neighbour remains our largest customer by a fair margin.

Current consensus forecasts peg 2013 U.S. housing starts at just under one million units. While this would remain significantly below the 20-year average, it would mark a 25 per cent jump from 2011 activity and fuel increased demand for B.C. lumber.

Exports to the U.S. are expected to increase by more than 10 per cent this year, but demand may be constrained by the relatively high proportion of multi-family unit construction as opposed to more lumber-intensive single-family units.

Higher U.S. starts and a rebound in China's economy are expected to generate a 10 per cent increase in lumber production in 2013, while elevated lumber prices will also benefit the sector. However, provincial production will not revisit mid2000 highs over the next decade, reflecting insufficient demand and lower timber supply due to the long-term impact of the mountain pine-beetle epidemic.
 

Source:The Vancouver Sun

Posted and edited by Riona, Hanbao News Department

Contact: rionach@cltimber.com